The impact of changing lake levels on property values: A hedonic model of lake Thurmond

Abstract

This study uses hedonic pricing models to examine the relationship between lake levels and property values for properties adjacent to Lake Thurmond. Lake Thurmond is located along the Savannah River Basin, bordering Georgia and South Carolina. Of the 1,030 properties from 2000-2009 for which data was reliable and available, 388 were lake front homes. The model of the effect of lake level on sales prices also includes home characteristics, home condition variables, lake attributes, and macroeconomic control variables. Results reveal a statistically significant change in sales price when the lake is closer to full pool. Results confirm that declining Lake Thurmond water levels have an impact on real estate values within some ranges below full pool. As climate variability places increasing pressure on communities, future research would benefit from further exploration into the relationship between economic activity and changing lake levels.